It's curious how the same stupidly simple market theories never apply in the inverse. Why is it that mass immigration doesn't increase rents across the rental market?
If you've got 5 properties and 6 people who need a home people are going to compete with each other until one is priced out. Conversely landlords are going to compete for renters if there are 4 people and 5 properties.
What part of that isn't true?
That's a simple, closed example but the principle is the same. I don't know how anyone can claim that something other than that is true.
But to answer your question, an increase in population increases housing costs. That's how we got here. It's not only migration, it's people having families and changing preferences with more people living alone. But the price pressure is applied unevenly. There is more demand where there is more work, some areas are more attractive to people for non-work reasons too.
But overall prices do go up with an increase in population, one reason why more housing needs to be built, and more housing where people want to live, mostly cities. That will reduce price pressures, provide work for people and generally make the country a nice place to live by reducing housing insecurity.
FFS they are not. They're an encoding of some the behavior and assumptions of a particular culture. That is almost certainly your culture, you HN commenter, but being embedded in it makes it hard to see it for what it is.
The other 'failure' is that many seem to assume only single optimums exist - in real world scenarios and even in simple somewhat contrived examples there are optimums that capture the market to the advantage of a few sellers and other optimums that deliver the most to large numbers of people.
Hotelling's Law is likely the simplest possible example of market theory producing a stable outcome that consumes more energy and is less efficient than a planned deployment; there are other examples of problematic outcomes from falling back into the narcotic embrace of "market forces".
I also don't think any economist fails to acknowledge that there may be multiple minima/maxima in a market. Hotelling law as we know today is an observation of an optimal game theory result - it actually does bring maximal payoff for the participants at equilibrium. If you want to change the equilibrium condition to say - minimize transportation and energy costs, you will likely have to change part of the rules of the game via policy/zoning/etc.
The "market forces" you speak of is simply the aggregate actions and result of people looking maximize their efforts. Embracing of market forces does not mean taking an ultra-capitalist-libertarian-laissez-faire view on economics. Instead it is acknowledging that the participants in the game will always seek to maximize their payoffs given a set of rules.
Naively discounting these "market forces" to act in this way and find unintended optimal solutions is where problematic outcomes occur by shortsighted policy makers. It is by NOT embracing the effect of market forces is where trouble arises.
I think the main reason we don’t see this is that very few places actually ever have ‘mass’ migration, relative to overall population. I found one study, which shows a relatively small effect that is probably hard to see considering all the other things that impacts housing prices: https://www.sciencedirect.com/science/article/pii/S016604622...
If the economy is bad you'll get also emigration to some extent.
If you increase the demand for housing without equally increasing the supply, price goes up.
I don't think one needs a PhD in economics to figure this out.
The number of births in the US in 2021 alone was 3.6 million [1].
Wonder why you aren’t on here advocating for more birth control.
[0] https://www.npr.org/2023/09/14/1199417599/immigrant-populati...
... it does? Or at least it can. Not on its own, but it's a contributing factor. An influx of demand without an increase of supply, in a market with an already-low vacancy rate, will of course increase rents.